Total compensation: What to ask for to get the most from your contract

For newly minted physicians landing that first post-residency gig, and for veteran physicians facing a contract negotiation, the word compensation probably calls one thing to mind: dollars.

However, while money is an essential component of any physician contract, it’s only part of the deal. In the face of an evolving medical workforce, it may pay to instead focus on total compensation rather than monetary compensation alone in order to get the most out of your agreement.

Definitions

First, let’s define some terms. There’s base salary, and there’s total compensation.

Base salary applies to most exempt employees, and it’s what many doctors prioritize when weighing a new contract or a new job.

Total compensation is everything else that comes along with the contract, besides the money. It may include things such as bonuses, paid time off, or profit-sharing distributions, and is arguably more relevant to doctors than base salary alone.

Total compensation: The better game to play

Total compensation is a more constructive and applicable way to evaluate compensation for a couple of reasons.

Helpful data is available

First, physician salary data is widely available. With a little digging, you can get a precise idea of what you should be making based on location, the type of employer, experience, and specialty. Furthermore, the workforce is changing, and people are more inclined to openly discuss what they’re getting paid.

In other words, negotiating base salary is a game of nearly complete information. Like chess, both parties can see the entire playing field and are working with a uniform set of tactics.

You don’t want to play chess, though. For the sake of negotiating a new or a first contract, you want to play poker: a game of incomplete information. In many cases, this is the realm of total compensation.

For example, if you’re a doctor vetting a potential employer, you probably know what they’re willing to pay, whether they offer a match with their retirement account, and how much paid time off they offer. But, what are they not telling you? Is there a doctor on their payroll who negotiated to have all of their CME costs covered? Did their anesthesiologist manage to get a monthly stipend to cover his cellphone bill? Did the ortho manage to lock in a credit to offset commuting costs?

The workforce is evolving

Total compensation is more constructive and applicable because throughout the US economy, the workforce has changed. Nearly everyone is hiring and nearly everyone is struggling to retain workers. Healthcare is no different.

The US was grappling with a physician shortage prior to COVID-19, then the pandemic forced many doctors who were on the fence about retirement to take the plunge. Hospitals and group practices need doctors, and they needed them yesterday.

Given this, while base salary is a largely known entity, you might be able to use total compensation for some extra leverage.

Factors you can negotiate

You don’t know until you ask. Here are some things worth inquiring about.

Bonuses

Last January, the AMA issued a report that outlined a prominent physician compensation trend. Increasingly, physician pay is tied to performance, with doctors receiving bonuses based on the quantity of patients that they see, and/or the quality of patient outcomes.

You can this to your advantage, negotiating the percentage of compensation stemming from performance-based pay.

Paid time off

Paid time off is another part of total compensation that’s open to negotiation. While more paid time off won’t increase your base pay, the more you amass, the more you’re getting paid not to work.

In the age of endemic physician burnout, we could all use more PTO.

Childcare

Maybe you have young children, or are planning to start a family. Consider that in many states, the cost of daycare is close to taking on a second monthly mortgage payment.

This, too, may be up for negotiation as part of your total compensation package. Inquire as to whether the employer offers a formal credit. If not, some healthcare organizations and hospitals have affiliated daycare centers. You can always ask to have daycare included as part of your total comp.

Gym memberships

Similar to childcare facilities, many community-based healthcare organizations are adding gyms to their roster of services. In a world of rising healthcare premiums, employers are incentivized to keep their employees healthy. This is something physician employers should know better than anyone else. It can’t hurt to ask if free or discounted memberships are available, or barring that, a stipend.

Sources

1. Abelson R. Doctors are calling it quits under stress of the pandemic. The New York Times. Published November 15, 2020.

2. AAMC report reinforces mounting physician shortage. Association of American Medical Colleges. Published June 11, 2021.

3. Average cost of child care by state. Move.org.

4. Herrera T. Why you should tell your co-workers how much money you make. The New York Times. Published August 31, 2018.

5. Physician salary. U.S. News & World Report.

6. Rama A. 2012-2018 Data on physician compensation methods: Upswing in compensation through the combination of salary and bonus. American Medical Association. Published online 2020.